In my last column, How Google Shopping will Disrupt Online Retail, I wrote about the effect that Google’s Product Listing Ads (PLAs) had on the demise of Google Shopping and how retailers should be prepared for the shakeup in the marketplace.
In this column, I want to focus on how PLAs will affect Google AdWords and how online merchants can make the most of the AdWords PPC campaigns by embracing the new format. Not only is the PLA now the default format for Google Shopping; it has also become a standard ad format on the main Google search results pages for product related searches.
In my role as the research marketing director, I recently performed a study of PLA performance. I compared PLAs to regular text ads in situations where the product targets matched up with similar keyword targets.
For example, I examined how a PLA campaign targeting “office furniture” matched up against a campaign populated by keywords that also targeted “office furniture” and related keywords. I then summed up data across many companies and categories to get a high-level view of PLA performance compared against traditional text ads.
The data showed that, among the top quality metrics, the PLA is the ad format of choice for product related searches on Google. When looking at consumer engagement with the ads, PLAs scored a click-through rate 68% higher than regular text ads.
PLAs also drove a conversion rate 38% higher than text ads, meaning that the PLA format is doing a better job of turning clicks into conversions. Based on the first two findings, it should be no surprise that return on ad spend for PLAs was 25% higher, meaning that PLAs provide better bottom line results.
Why do PLAs perform better? Consider these three key factors.
1. Relevance – Google is making an active effort to drive product related searches to PLAs
2. Real Estate – PLAs are now being added at the top of search results pages, giving them high visibility and pushing down organic links
3. Format – PLAs include a picture and a price, two eye-catching items that give PLAs a significant advantage over text ads
How can you benefit from PLAs?
The following tips can help marketers maximize paid search traffic from PLAs.
· Get started now: Early movers will benefit from fewer competitors. Upload your feed to the Google Merchant Center and link it to your AdWords account to get started.
· Price is key: The PLA format shows your product’s price against all of your competitors’. Choose your product targets on the categories and products where you know that you have a natural advantage.
· Promotion can compensate for high prices: PLAs allow you to customize a line of promotional text. Make sure to use it smartly to highlight the benefits of shopping with your store. Free shipping, an easy returns policy and live support are all worthwhile reasons to pay more for a product from your store.
· Optimize: Google PLAs outperformed text ads in many ways, generating higher click-through rates, conversion rates, a lower cost-per-click and higher return on ad spend. Custom bid algorithms have begun to emerge that improve results even more, but with or without those, marketers should make sure to spend the time tweaking bids as they would with regular AdWords ads.